The promise of a college degree: Does West Virginia's merit-based scholarship program increase a student's propensity to graduate

The goal of this study is to determine if there is a correlation between receiving lottery-funded merit-based state scholarships and earning a bachelor's degree at a public in-state college within four years of initial enrollment. Using data of first-time freshmen in West Virginia, this paper focuses specifically on the students closest to the academic criteria of the state's merit-based state scholarship program, named PROMISE (Providing Real Opportunities for Maximizing In-State Student Excellence), to determine if receiving the lottery scholarship translates into increased graduation rates for the students at the margin.;The analyses in this study demonstrate that PROMISE scholars graduate within four years at a higher rate than non-PROMISE scholars. The empirical model studying the full population demonstrates that receiving the PROMISE scholarship increases the odds of graduating by a factor of 1.54 while the specification model which looks at those at the margins finds that receiving the PROMISE scholarship increases the odds of graduating within four years by a factor of 2.465, all other factors remaining equal. Further, the classifying criteria used to determine PROMISE scholarship recipients of high school grade point average (GPA), composite ACT score and lowest ACT subscore are predictive of a student's increased propensity to earn a bachelor's degree within four years when studying the entire cohort of first-time freshmen.